Jet2 Swings To £450m First Half Profit

UK low-cost airline Jet2 swung to a higher-than-expected profit for the six months to end-September as it benefitted from a surge in higher-margin package holiday bookings amid a wave of pent-up demand.

It reports £505 million ($611 million) in profit before tax and forex adjustment for the period, a 44% improvement on its 2019 performance and a nearly £200 million loss in the same period last year.

Seat capacity was 14% higher than pre-pandemic and load factor rose to 90.7%, only marginally below 2019, with the mix of package holiday customers rising to 65.9%, up 13 percentage points against 2019.

Jet2 was at pains through the pandemic to prepare itself early for the recovery, retaining most staff and acting ahead of time to re-recruit for those roles that it cut back on.

This left it "very well prepared" for summer operations, explains chairman Philip Meeson, and also "enabled Jet2.com to earn the accolade of being the only UK airline not to cancel a flight during July and August 2022.”

However, wider industry challenges, with the airline highlighting a “lack of planning and preparedness” at airports and other suppliers led to some disruption, with the company incurring EU261 payments of £50 million, which was “materially higher“ than in Summer 2019.

Jet2 notes that winter bookings are “encouraging” with “robust” pricing, “but recognising that the important post-Christmas booking period is still to come, we are presently on track to exceed current average market expectations for Group profit before FX revaluation and taxation for the year ending 31 March 2023.”

It also highlights the cost pressures from fuel, carbon, higher wages and a strong US dollar, which “leads us to conclude that margins may come under some pressure.”

However, the company’s tailored product mix means that “we remain confident that our customers’ eagerness to take their much valued and anticipated holidays will remain high.”